Assessment of potential bottlenecks along the materials supply chain for the future deployment of

196 Pages·2016·7.73 MB·English

by  Grainne Mulhern

Assessment of potential bottlenecks
along the materials supply chain for
the future deployment of low-carbon
energy and transport technologies in
the EU
Wind power, photovoltaic and
electric vehicles technologies,
time frame: 2015-2030

Darina T. BLAGOEVA, Patrícia AVES DIAS,
Alain MARMIER, Claudiu C. PAVEL
2016

EUR 28192 EN
This publication is a Science for Policy report by the Joint Research Centre (JRC), the European Commission’s
science and knowledge service. It aims to provide evidence-based scientific support to the European policy-
making process. The scientific output expressed does not imply a policy position of the European Commission.
Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use
which might be made of this publication.

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Name: Darina T. Blagoeva
Address: European Commission, Joint Research Centre, PO Box 2, NL-1755 ZG Petten, the Netherlands
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EUR 28192 EN

PDF ISBN 978-92-79-63406-2 ISSN 1831-9424 doi:10.2790/08169
Print ISBN 978-92-79-63405-5 ISSN 1018-5593 doi:10.2790/198578

Luxembourg: Publications Office of the European Union, 2016

© European Union, 2016

Reproduction is authorised provided the source is acknowledged.

How to cite: D. T. Blagoeva, P. Alves Dias, A. Marmier, C.C. Pavel; Assessment of potential bottlenecks along the
materials supply chain for the future deployment of low-carbon energy and transport technologies in the EU.
Wind power, photovoltaic and electric vehicles technologies, time frame: 2015-2030; EUR 28192 EN;
doi:10.2790/08169

All images © European Union 2016, except: figure 6: source Materials Research Society; figure 42: source
Fraunhofer IAO; figure 71, 72: source Cambridge Econometrics.

Assessment of potential bottlenecks along the materials supply chain for the future deployment of
low-carbon energy and transport technologies in the EU. Wind power, photovoltaic and electric
vehicles technologies, time frame: 2015-2030

Abstract:

The ambitious EU policy to reduce greenhouse gas emissions in combination with a significant adoption of low-
carbon energy and transport technologies will lead to strong growth in the demand for certain raw materials. This
report addresses the EU resilience in view of supply of the key materials required for the large deployment of
selected low-carbon technologies, namely wind, photovoltaic and electric vehicles. A comprehensive
methodology based on various indicators is used to determine the EU’s resilience to supply bottlenecks along the
complete supply chain – from raw materials to final components manufacturing.
The results revealed that, in 2015, the EU had low resilience to supply bottlenecks for dysprosium, neodymium,
praseodymium and graphite, medium resilience to supply of indium, silver, silicon, cobalt and lithium and high
resilience to supply of carbon fibre composites. In the worst case scenario where no mitigation measures are
adopted, the materials list with supply issues will grow until 2030. Indium, silver, cobalt and lithium will add up to
the 2015 list.
However, the probability of material supply shortages for these three low-carbon technologies might diminish by
2030 as a result of mitigation measures considered in the present analysis, i.e. increasing the EU raw materials
production, adoption of recycling and substitution. In such optimistic conditions, most of the materials
investigated are rated as medium or high resilience. The exceptions are neodymium and praseodymium in
electric vehicles, for which the EU resilience will remain low.
Assessment of potential bottlenecks
along the materials supply chain for the
future deployment of low-carbon energy
and transport technologies in the EU

Wind power, photovoltaic and electric vehicles
technologies, time frame: 2015-2030

Darina T. BLAGOEVA, Patrícia AVES DIAS, Alain MARMIER, Claudiu C.
PAVEL

Joint Research Centre
Directorate C - Energy, Transport and Climate
Knowledge for Energy Union Unit

- 2016 -

Table of contents
Acknowledgements ................................................................................................ 7
Executive summary ............................................................................................... 8
1 Introduction .................................................................................................. 10
1.1 Background ............................................................................................. 10
1.2 Scope of the study ................................................................................... 12
2 Methodology ................................................................................................. 13
2.1 Dimensions ............................................................................................. 14
2.2 Indicators ............................................................................................... 14
2.2.1 D1.1 Material demand ....................................................................... 15
2.2.2 D1.2 Investment potential ................................................................. 16
2.2.3 D1.3 Stability of supply ..................................................................... 17
2.2.4 D1.4 Depletion of reserves ................................................................. 18
2.2.5 D1.5 Import reliance ......................................................................... 19
2.2.6 D1.6 Supply adequacy ....................................................................... 20
2.2.7 D1.7 Recycling ................................................................................. 20
2.2.8 D1.8 Substitution .............................................................................. 22
2.2.9 D2.1 Supply chain dependency ........................................................... 22
2.2.10 D2.2 Purchasing potential .................................................................. 23
2.2.11 D2.3 Material cost impact .................................................................. 24
2.3 Indicator aggregation and data visualisation ................................................ 25
2.4 Assessment scenarios ............................................................................... 26
3 Determination of material supply bottlenecks in the wind power sector ................ 27
3.1 Market and wind technology background ..................................................... 27
3.2 Materials for wind turbine generators.......................................................... 29
3.2.1 Neodymium ..................................................................................... 30
3.2.2 Praseodymium .................................................................................. 32
3.2.3 Dysprosium ...................................................................................... 34
3.3 Materials for turbine blades ....................................................................... 36
3.3.1 Carbon fibre composite (CFC) ............................................................. 37
3.4 Wind technology resilience charts ............................................................... 38
4 Determination of material supply bottlenecks in the solar PV sector ..................... 42
4.1 Market and PV technology background ........................................................ 42
4.2 Materials in crystalline silicon technology .................................................... 44
4.2.1 Silicon ............................................................................................. 45
4.2.2 Silver .............................................................................................. 47
4.3 Materials in thin-film amorphous silicon technology ...................................... 49
4.3.1 Silicon ............................................................................................. 49
4.4 Materials in thin-film CIGS technology ........................................................ 49
4.4.1 Indium ............................................................................................ 50
4.4.2 Copper ............................................................................................ 52
4.4.3 Gallium ............................................................................................ 52
4.4.4 Selenium ......................................................................................... 52
4.5 Materials in thin-film CdTe technology ........................................................ 52
4.5.1 Cadmium ......................................................................................... 52
4.5.2 Tellurium ......................................................................................... 52
4.6 PV technology resilience charts .................................................................. 53
5 Determination of material supply bottlenecks in the electric vehicles sector .......... 57
5.1 Market and EV technology background ........................................................ 57
5.2 Materials in rechargeable batteries: lithium-ion battery (LIB)......................... 59
5.2.1 Lithium ............................................................................................ 60
5.2.2 Cobalt ............................................................................................. 62
5.2.3 Graphite .......................................................................................... 64
5.3 Materials in electric traction motors ............................................................ 66
5.3.1 Neodymium ..................................................................................... 67
5.3.2 Praseodymium .................................................................................. 69
5.3.3 Dysprosium ...................................................................................... 71
5.4 EV technology resilience charts .................................................................. 73
6 Conclusions .................................................................................................. 78
References ......................................................................................................... 81
List of abbreviations and definitions ....................................................................... 92
List of figures ...................................................................................................... 93
List of tables ....................................................................................................... 96
Annex A. Overview of indicators .......................................................................... 101
Annex B. Supporting information for calculation of indicators .................................. 115
B.1 Wind power sector ................................................................................. 115
B.1.1 Deployment scenarios ..................................................................... 115
B.1.2 Assumptions .................................................................................. 115
B.1.3 Indicator D1.1 Material demand ........................................................ 116
B.1.4 Indicator D1.2 Investment potential .................................................. 118
B.1.5 Indicator D1.3 Stability of supply ...................................................... 119
B.1.6 Indicator D1.4 Reserves depletion ..................................................... 120
B.1.7 Indicator D1.5 Import reliance .......................................................... 121
B.1.8 Indicator D1.6 Supply adequacy ....................................................... 123
B.1.9 Indicator D1.7 Recycling .................................................................. 123
B.1.10 Indicator D1.8 Substitution .............................................................. 124
B.1.11 Indicator D2.1 Supply chain dependency ........................................... 124
B.1.12 Indicator D2.2 Purchasing potential ................................................... 127
B.1.13 Indicator D2.3 Material cost impact ................................................... 128
B.2 Solar PV power ...................................................................................... 129
B.2.1 Deployment scenarios ..................................................................... 129
B.2.2 Assumptions .................................................................................. 130
B.2.3 Indicator D1.1 Material demand ........................................................ 131
B.2.4 Indicator D1.2 Investment potential .................................................. 133
B.2.5 Indicator D1.3 Stability of supply ...................................................... 133
B.2.6 Indicator D1.4 Reserves depletion ..................................................... 137
B.2.7 Indicator D1.5 Import reliance .......................................................... 138
B.2.8 Indicator D1.6 Supply adequacy ....................................................... 140
B.2.9 Indicator D1.7 Recycling .................................................................. 140
B.2.10 Indicator D1.8 Substitution .............................................................. 141
B.2.11 Indicator D2.1 Supply chain dependency ........................................... 142
B.2.12 Indicator D2.2 Purchasing potential ................................................... 145
B.2.13 Indicator D2.3 Material cost impact ................................................... 145
B.3 Electric vehicles sector ............................................................................ 146
B.3.1 Deployment scenarios ..................................................................... 146
B.3.2 Assumptions .................................................................................. 149
B.3.3 Indicator D1.1 Material demand ........................................................ 167
B.3.4 Indicator D1.2 Investment potential .................................................. 170
B.3.5 Indicator D1.3 Stability of supply ...................................................... 170
B.3.6 Indicator D1.4 Reserves depletion ..................................................... 173
B.3.7 Indicator D1.5 Import reliance .......................................................... 173
B.3.8 Indicator D1.6 Supply adequacy ....................................................... 177
B.3.9 Indicator D1.7 Recycling .................................................................. 177
B.3.10 Indicator D1.8 Substitution .............................................................. 179
B.3.11 Indicator D2.1 Supply chain dependency ........................................... 180
B.3.12 Indicator D2.2 Purchasing potential ................................................... 183
B.3.13 Indicator D2.3 Material cost impact ................................................... 183
Annex C. Methodology for data collection and aggregation on mine capacities .......... 185
Acknowledgements
The authors would like to thank the following industrial stakeholders and organisations
for valuable inputs during the preparation of the report: Umicore N.V., Darton
Commodities Ltd, International Lead and Zinc Study Group, International Nickel Study
Group, International Copper Study Group, DG GROWTH and RMSG

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Executive summary
Policy context
The aim of this study is to give a quantitative indication of the EU’s resilience regarding
the supply of materials relevant for the deployment of low-carbon energy and transport
technologies. The report focuses on wind, photovoltaic and electric vehicles within the
2030 time frame. The complete materials supply chain has been considered in this
analysis – from raw materials to final components production.
Methodology
The analysis is based on a comprehensive methodology, which relies on sets of
indicators aggregated in two dimensions: upstream and downstream.
The upstream dimension is designed to give an indication of the EU’s resilience in terms
of a secure, sustainable and adequate supply of raw materials. A set of eight indicators
in this dimension are developed reflecting different supply aspects. These aspects range
from the mineral resources availability, current and potential mining/refining suppliers,
EU reliance on imports, macroeconomic, environmental and geopolitical factors to
recycling and substitution. Particular attention has been given to estimate the current
and future demand for materials required for these technologies in the EU and worldwide
to assess the adequacy of the forthcoming materials supply.
To complement the resilience evaluation, the downstream dimension – built on a set of
three indicators – is designed to address the EU supply chain dependency on processed
materials and components required to underpin the deployment of wind, photovoltaic
and electric vehicles technologies in the Union. Aspects related to costs, markets and
investment capability are also included.
Key conclusions
The main results of this study are presented in the chart below:

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The analysis shows that in 2015 the EU had a low resilience to potential bottlenecks in
the supply for several materials such as: the rare earths – neodymium (Nd),
praseodymium (Pr) and dysprosium (Dy) – used in wind and electric vehicles
technologies, as well as for graphite (C) required in rechargeable batteries in electric
vehicles. Moderate supply issues are seen for indium (In), silver (Ag) and silicon (Si) in
the photovoltaic technology as well as cobalt (Co) and lithium (Li) in electric vehicles.
The resilience to supply bottlenecks for carbon fibre composites (CFC) used in wind
turbine blades is evaluated as high. The demand for selenium (Se), copper (Cu), gallium
(Ga), tellurium (Te) and cadmium (Cd) in photovoltaic technology is marginal compared
to the global supply. Therefore, for these materials the estimated EU resilience is also
high.
The resilience will change by 2030 mainly due to increasing materials demand as a result
of growing deployment rates of these technologies as well as potential adoption of
different mitigation measures to improve material supply. Under a conservative scenario,
defined here as a baseline scenario where no mitigation measures will be in place, the
EU resilience to supply bottlenecks for a larger number of materials is assessed as low.
This will include Nd, Pr and Dy for wind turbines and electric vehicles, In and Ag for
photovoltaic, as well as Co, graphite and Li for electric vehicles. Some moderate supply
issues are expected for Si in photovoltaic while no issues are envisaged for CFC in wind
turbine as well as Se, Cd, Cu, Ga and Te in photovoltaic technology.
The EU resilience to materials supply bottlenecks might improve considerably by 2030 if
adequate measures to balance the expected growing material demand are taken. Such
measures include an increase in the EU raw materials production, recycling or
implementing substitution. In such optimistic conditions, the EU resilience to supply
bottlenecks of rare earths in wind turbines is expected to evolve from low to medium. A
similar transition, from low to medium resilience, could be also seen for In and Ag in
photovoltaic technology. The most stringent situation in terms of material supply is
expected for electric vehicles. For this technology, the EU resilience to materials supply
bottlenecks remains low for Nd and Pr, medium for Dy, graphite and Co, while for Li it is
still medium but approaching the low resilience threshold.
Finally, the report identifies the mitigation measures that are best suited to ensure a
secure supply along the value chain of materials in each of the investigated technologies.
For the majority of the materials, it appears that substitution is the most effective
measure to improve the EU resilience to supply bottlenecks, followed by recycling and
increasing the EU’s production of raw materials. Engagement to promote such mitigation
measures is likely to be essential for securing materials supply for the deployment of
these three low-carbon technologies.
Future work will look at potential material issues in other sectors such as efficient
lighting, energy storage and smart grids.

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